. welcome to "worldwide exchange." you're seeing live shots from paris where mario draghi is speaking at a conference. let's listen in. >> certainly there has been recent progress in the convergence of relative costs and internal and external imbalance and i want to say a few words about this progress because we also miss to acknowledge the positive things that have happened in recent months. is this reflects stronger policy as well as structural reforms.

trade balances havele also improv improved. in most cases this improvement has resulted from a combination of a relatively strong export growth particularly in spain and portugal, and very weak or negative import growth notably in greece. the contraction of domestic demand continues to play a role in this adjustment. part of this is cyclical. but it also reflects rebalance from previously unsustainable domestic demand growth. demand has to be contained and sbla h supply has to be increased. supply adjustment takes more time. there are also signs that competitiveness gains have contributed to recent improvements in current accounts. exports have held up relatively well in view of the weakening of

external demand. exports of goods and services have increased by 22% in volume for spain since 2009, and by 15% for ireland, 22% for portugal, 19% for italy. more importantly, some countries that lost export shares before the crisis has since registered positive perform arranges notably spain and portugal. this shows improvements in cost competitiveness and dwaynes in export market shares in most of the countries where the immediate for adjustment is largest. the downward adjustment of unit labor costs is proceeding in these countries. the countries with the largest imbalances have notably recaptured some of the losses in competitiveness incurred previously. all this is welcome, but it would have been preferable if these adjustments had occurred before the eu imf programs had

to be put in place in some of these countries. the gains in cost competitiveness responded only to adjustments in relative wages. productivity matters. in low productivity sectors, labor shedding as increased aggregate productive, particularly ireland and spain. we expect the progress in structure reforms especially those that improve the function of the labor markets and product markets will add lower unemployment and facility new employment opportunities. the reform momentum has been 34r5 particularly pronounced in some countries which many cases coincide with those countries that face the largest adjustment needs. despite the adjustment in relative unit labor cost, the

overall price adjustment, however, has been much less pronounced. and there is clear evidence that increasing profits contributed to a large extent to upward pressures on prices in some countries. it is of paramount importance to address the lack of competition in a number of areas with strong vested interests. this is imperative to ensure that the flexibility of wage costs translates into the necessary gains in price competitiveness. this is true in particular for the service sector that had been most shielded from competition. what more can be done to maintain the positive performance momentum and to integrate those parts of the euro area that are lagging behind? some euro area countries are not taking full advantage of their well educated labor forces and

their potential in terms of innovation and global reach. they could greatly benefit first maintaining a growth friendly business environment, and they could greatly benefit from reinventing their production structure, upgrading quality, and redistricting their exports towards strongly growing markets. innovation is crucial in this respect. this means for a start that where profit margins are restored, they should serve to fund research and development to higher extent. but innovation potential is not always translated into actual marketable employment creating and growth sustaining innovation. what is key in translating potential is the regime of economic incentives. and it is indeed this system of economic incentives that the current waiver of structural reforms in the euro area is

addressing. central challenge is to set conditions so that the skills of the labor force especially of our young people can be profitably employed in competitive firms or in the new enterprises that will go on to set up. in this vain, removing rigidity clearly races the potential for growth and job creation. and this of course, the resumption of growth, is fundamental to returning toward a sustainable fiscal position. concretely, we must identify the bottlenecks that prevent the vast resource of the euro area being used most fruitfully. the world bank's latest doing business report highlights greece as one of ten countries that have most improved the ease of doing business from a rather unfavorable level. the momentum is clearly going in

the right direction, although much remains to be done. spain and portugal were among the countries that marie solving insolvent firms easier. crucial agreement for restructuring the economy in this transition period as resources must shift from unproductive to productive activities. it is the latter that create jobs. this reallocation process, though sometimes painful in the short run, i'll say always painful in the short run, carries the seed of future prosperity. a growing body of knowledge shows that by increasing the ability of the economy to adjust so that factors can be reallocated to the most competitive firms, aggregate labor productivity can increase substantially. some studies indicate a gain of as much as 20 force 30%. the current focus on competitiveness in france leading towards an institutional and fiscal set up that can support firms investment in

innovation is therefore a welcome step in the right direction. another important aspect is the growth and competitiveness enhancing potential of further market integration in europe. one example is a very recent study which finds that applying the eu patent would raise the gains for european firms from patent and inventions by 60%. furthermore, those gains would more than double with best practices. i quote this example to show that improving competitiveness in europe does not imply a race between euro area countries but rather the exploitation of their competitive advantage in the single market and a global economy that offer far greater growth possibility than each economy on its own. >> you're watching "worldwide exchange." i'm kelly evans and these are your headlines.

draghi uses his speech to turn up the heat on eurozone governments telling leaders into the to rely on the ecb to stabilize the currency bloc. germany's finance minister warns a greek default could spell the end of the euro as the country's lawmakers prepare to vote on new funds for athens. and japan posts surprisingly strong industrial output this october and the government announces a $10.8 billion stimulus package. tokyo stocks end the week at a seven month high. plus president obama will take his case for tax hikes on the wealthy to the american people today as the war of words between democrats and republicans over the fiscal cliff heats up. the trading session sitting roughly flat on the stoxx 600. decliners and advancers about even this morning. markets are trying to digest

these comments from draghi. first, let's take a look at the bourses. s it is the last trading day of the month. just one left to go in this extraordinary 2012. ibex 35 appropriately enough is ending in the red today. other indexes showing a little bit of a rise here. we've seen spanish and italian debt come in sharply and the yields falling today. we saw the euro-dollar adding almost 0.3%s this morning. dollar-yen up two thirds of a percent in the light of perhaps japan may be getting moring a yes, sir sif on st

ing a grefs saggressive on stim. let's get over to deidre wang morr morris. >> yes, the japanese data was good, but also the economy still stuck in deflation. hang seng down half a percent. we had pic stay in focus, not listed yet, but supposed to ipo on december 7th. they priced the range at the moment of their indicative range. it will be a 3.1 u.s. billion dollar ipo and that would be hong kong's largest in about two years. looking at some of the other markets, the kospi finished with somes losses down 0.1%. asx finishing up 0.6%. let's get over to the november performances because it was a pretty good showing for the

month. nikkei of course the outperformer. kelly mentioned the yen. it has been weakening against the u.s. dollar and that has been providing a lot of support. also directly related to politics in japan. this has been in focus over the last month or so. opposition leader expected to be the next prime minister when the country votes. so he has been talking about a lot of aggressive monetary easing and talking about an inflation target of about 2%. so stocks have really been on a roll. the kospi finishing up with just about 1.1% gain in november. we have the asx finishing just slightly lower about a quarter of a percent. and the hang seng continues to win finishing i believe a third month of gains up 1.8% in the month of november. and shanghai composite finishing down 4.3%. i mean, that's in the even in line with the other indexes and

indicative of the performance year to date. shanghai stocks are done about 10.5% even though we do have signs of an improving economy, so sunday we will get the official pmi number which is expected to come in at a seven month high. but investors don't seem to be looking at the data, don't listening to policymakers. and kelly, one final note. one bit of news from china today, they are getting the iphone 5, that will be on sale in the middle of december. so they haven't got it yet, but they will. and lots of excited apple fans out there. >> deidre wang morris, thanks very much. maybe we'll see the same effect in china. mario tdraghi is done speaking. he's basically focused on two elements and that's competent i haveness and rebalancing. calling for the need it for both in the eurozone and alluding to the difficulty the bloc has had

when it comes to the internal devaluation and again some of the figures everyone this morning from germany. for more, let's introduce adrian schmidt. adrian, 1.30 for the euro on the back of the comments. strong rally today. will the run continue? >> i think it will be a struggle to get through 1.3030, but the move up to 1.30 is really more about general positive risk appetite on the back of optimism about the fiscal cliff. so that are probably be more of the driver. if we see more news suggesting that maybe something will be done by christmas, perhaps we can advance some more. the dollar still very much negative currency. >> what about the vote we're expecting out of germany with regards to greece, how important is this one? >> it's important, but fairly clear that it will pass. i don't think anybody has any incentive to block it. i think much more of a problem for greece is whether they'll manage that bond buy back. because it's not in the bank's

interests at the moment. and there's a problem definitely in achieving the 30 billion required. >> it would certainly seem that it would help support the risk taking we've seen, but even though we're seeing the greek banks react negatively to the news and people wondering what it means if some of the private sector holdouts from the last time around, pension funds and the banks, have to take more losses. >> there isn't a lot of incentives for the greek banks to participate. so it's not clear how that will happen. some of the bond holders could convinced to sell to greece if the price is right. the price that's being appeared to be set, although it doesn't look realistic, so it may be adjusted, but -- >> what's more realistic in your

view? >> clearly the market was up since the price they set on friday, so it doesn't make sense to do it there anymore. in terms of what i think is realistic, i mean, it's not really about what the value of the bonds is. it's a question of where the market is at the time. and also where it's marked in the greek bank's books. >> good point. >> that's the clear problem that they don't want to -- >> 2012, we can almost look about a as the year of the teflon euro. if you asked where it would be at year end, they might say parity. we're at 1.30 and it does seem pretty remarkable. will that continue in 2013? >> i think it probably is because the underlying story is mostly foreign exchange tends to be determined by yield spreads and yield spreads aren't going to do very much because once you hit close it zero in most of the machblg countries, there's not a lot of scope to move. on an aggregate basis, of course, the euro situation in

terms of current account position for instance is reasonably solid. very much on an individual basis. so can you head off expectations. once you've done that, they're still significant in terms of growth in the region. >> even though we've heard talk that the ecb might ease and that the u.s. for it part may be looking stronger? >> the ecb is pretty limited. the deposit rate -- they're reluctant to go to negative. market rates are already hovering there. so not a huge amount of difference to market rates. even if the u.s. growth numbers are stronger, they might be stronger only because they're heading off the fiscal cliff. there's still more fiscal tightening to do. >> i'm just trying to get a reasonable trip to greece here. you're con founding my hopes. but thanks very much for stopping by.

and i had dree adrian reminding us that the 1.30 level may be around to stay. coming up a little later, what toys will kids be badgering parents for this christmas? beccy and geoff visited the fair to find out. having you ship my gifts couldn't be easier. well, having a ton of locations doesn't hurt. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office.

welcome back. japan has finally gotten a bit of a reprieve. here are the details from korea. >> a raft of economic data out, some of it surprising toward the up side. industrial output recovering to 1.8% versus expectations of a fall of 2.2%. things are not looking so upbeat elsewhere. jobless rate coming in at 4.2% in line with expectations. closely watched consumer price index also came in flat as expected. this follows five months of decline, further cementing views that the boj will roll out additional monetary easing. of course price stabilization a key point of contention next month elections, both the ruling democratic party of japan and its main rival the liberal democratic party investigating the need for the central bank it on did more.

japanese household spending fell 1% from a year earlier showing consumers have yet to loosen their purse strings worried about the economic outlook at home and abroad. but on the bright side, the drop was less than the 0.9% an lis were looking for. there a lot of pressure now on the boj to beat deflation, but what does that mean for the asian population which is counting on their savings? here is what one market watcher had to say. >> there is a big issue here and the strange thing about it is that it will probably be those older, conservative especially rural voters who are going to put ldp into power this this month for a long time especially if we do get inflation kicking in. japanese savers and post office savers in particular are not going to be very happy at the prospect of earning what amounts to about 0% on their savings. and that could see big shifts in thinking among savers going

forward. >> that's the latest from japan. back on you. >> sticking with tokyo for the molt, moment, it has given the thumbs up for a $10.8 billion stimulus plan. this approval comes as part of the government's push to support the economy ahead of the election. it's about double the size of the last stimulus package announced just last month. for more on this, joining us now is chief economist for emerging markets at bbba. thank you for joining us. you can give a sense as to whether this stimulus package is expected to finally revive hopes for japan's economy? >> i'm afraid that we've seen too much of that, it's been already like two decades seeing fiscal and monetary packages coming in on top of an economy that actually needed deleveraging. and there's lots of lessons we

can learn for europe on japan's experience. there's really not much you can do. you need to go through that what japan needs is liberalization. opening up to everything you can imagine which comes from a broad labor force to competition. that's what japan really needs. so i am not very positive on this additional fiscal stimulus package. >> is what kind of structural reform are you talking about? because it does seem as though for an economy like japan's, it is fiscal stimulus, it is monetary stimulus that has to come in and avoid a broader downturn. >> as i mentioned, i mean, fiscal and monetary stimulus are welcome when you are in the process of recovery. but i don't think japan is still there. there's been interest kind of recovery after the earthquake, but that was like basic things and we're seeing it dying out no matter what the data actually

showed. i wouldn't read too much on the current data. what japan needs in terms of structural reforms is young labor force, new ideas, and open the market which is still large to foreign competition. we simply create new markets, new ideas from japan. >> it certainly doesn't help that its neighbor and big trade partner china has been weak lately. and on this note, just want to bring people this news. china is expected to post strong pmi data from november that could help cement the country's recovery sorry. markets expect mainland manufacturing activity to record its fastest pace of growth in seven months, but they'll have to wait until monday to react. official data at 2:00 a.m. central european time. we won't be covering that one live. but is there a sense in your view that china may be showing

better growth prospects here? >> yeah, i mean of course fourth quarter have to be better. all analysts around the globe were expecting lard third quarter which didn't happen, so we all delayed the recovery in china to the fourth quarter. and it's coming, but on the backdrop of of course fiscal and monetary stimulus not as large as it used to be in the previous global recession. but it's there. so it's clearly coming. but i don't think the recovery will be as strong as what we saw in 2010, early 2011. it's going to be weak. so i think we should all get used to china growing around 7.75% even to 2013. >> we'll leave it there. thanks for your time today. now, still to come on the

program, the latest gdp figures out of india have disappointed. we'll ask what it takes to boost growth now.

welcome back. these are your headlines. mario draghi turns up the heat on eurozone governments, says not to rely solely on the ecb. >> the crisis has shown that we were living in the fairy world in the sense that we underestimated our amount of our equilibrium. >> and a greek tee fault could be the end of the euro. and japan posts surprisingly strong industrial output in october and the government announces yet another stimulus package sending tokyo stocks to a seven month high. and president obama takes his case for tax hikes for the wealthy to the american people as the war of words between democrats and republicans over the fiscal cliff heats up. european markets not so much of a fairy world if we can use the

draghi expression. a little higher. xetra dax leading the way up 0.3%. cac 40, ftse 100 on its heats. ibex 35 is lower. bond space shows pretty positive attitude, as well. yields falling in spain, italy again this morning. 5.35%, 4.54%. we did of course see italy above the 4.5% yesterday. ten year moving up a little bit, but still south of 1.4%. the euro-dollar has been on the rebound this morning. and look at that up a quarter of a percent. dollar-yen certainly one to watch as we talk about whether japan can finally revive hopes for its economy adding two thirds of a percent to 82.66 this morning. india's latest gtp report highlights just how much it's in need of policy reform. let's go to new delhi. a disappointing set of gdp

figures. what's the government reaction now? >> yes, gdp figures are disappoint and that's what the government has admitted. but the government is working on a concrete plan to get growth back on track. gdp numbers have come in at 5.3% versus the 5.5% in the last quarter and primarily this is because of the slowdown in manufacturing growth which led to a slowdown in industrial growth. the government is focusing onseting up a national investment board and the government hopes with the infrastructure project back on track, growth should be higher than the estimated 5.5%. and also that this will enable central bank to ease monetary policy in order to make funds

available for corporates for higher investment. target at 5.3% is also being worked on and likely to be met which is again something which will help the rbi to ease. back to you. >> tv 18 in new delhi. for more now, we're joined by chief economist for india and asean at hsbc. we heard talking about wherein from a structure spending, plans by the government are the next step. whether will those be enough in. >> that's what the economy need ps p the weak growth is lack of implementation of projects over a number of years now. it's also a reflection of very slow implementation of deeper rooted structure all reforms also for a number of years now. so the thing that's helped is not by easing monetary policy,

but really to basically address the supply side weakness in the economy. le it will be politically difficult to get some of the reforms through. but some traction will help gladly lift glet. but if i have to characterize the kind of recovery that we're looking at, it's more like a bathtub shaped recovery when we're currently now just scraping the bottom. >> i hope that means at some point it isn't going down the drain. we heard a lot of people saying maybe there's still a double digit growth quarter left. is that your view that it's possible with enough of the right elements in place to get back to one of the stronger periods of growth or is it time to accept that that's now behind? >> no, i think it certainly is possible to move back to higher place of growth in india.

i think what you have to be realistic about is number one how quickly these necessary reforms can get implemented and also when they do, they do have some lead time. so i think we're probably two to three years down the road before we're back to around 8% growth. if you can look beyond the next two to three years, we're moving toward a stronger pace of growth, but recovery quite retracted. >> how much of a setback is the weakness for neighboring india or still its own problems plaguing it? >> it's becoming more reliant on

foreign capital in-flows. so when the global conditions tighten on that front, it also has implications. but the main reason for the slowdown right now is really those domestic factor, lack of implementation of fiscal i infrastructure. so they have to focus there now and the government is certainly sounding much more strong tone about that. so that's one of the reasons why we think there will be some progress at least. >> what are some of your favorite leading indicators for growth? what sense are you getting of how the euro may shape up? >> i think a good leading indicator for growth in india would be how the win tr parliamentary session will go. if they manage to get some policy reforms through on that front, i think that will bode well in terms of domestic sentiment and support the investment cycle. that would of course be important for growth in and of

itself. more specifically in terms of leading indicators, what we tend to look at, pmi for the manufacturing and services sector, indicators that give and you good sense of the underlying momentum in the economy. so as i said, we're looking at some stabilization of growth right now, but it will be more flattish growth over the next couple of quarters. and then gradual recovery here after. >> all right. we'll leave it there. even in india, politics matter. can't get away from it. now, in the ipo space, india is about to see its biggest offering in two years. the telecom tower arm of india phone giant is set to raise $825 million next month. the firm will sell shares at a discount to global appears. analysts say it will likely benefit from a revival in risk appetite. meanwhile in japan, the promise of a leadership change has triggered big surge of foreign

investor interest in the market. the details from the nikkei. >> foreign investors bought $7 billion more in shares than they sold last week in the japanese stock market. that's the highest net level purchase in 20 months. the nikkei 225 climbed 4% last week alone after noda said he was dissolving the lower house secretary the stage for election on december 16th. this week tokyo equities continued the positive momentum. markets are factoring in further ease aing if the opposition ldp party wins in the polls. foreign investors expect wen will help ease the negative impact of a strong yen on japanese exporters. no surprise then why stocks like cannon gained 7% last week. but there are also worries from market watchers that japan's recent rally may be driven mostly by short term investors such as then funds.

that's what happened following the boj decision to ease monetary decision back in february. the market proceeded to dip a couple months after that. back to you, kelly. >> okay. thank you very much for that. now, the battle between who is right and who is wrong continues with research firm muddy waters threatening to counter sue owe olam. deidre, what's the latest? >> it is quite the battle of some pretty epic corporate proportions. now, the two olam and muddy waters have been trading bashes that started when muddy waters accused olam saying accounting practices were shoddy, so was its business model and warning investors that it risks insolvency. in the latest, muddy waters is saying that it will pay out of its own pocket for olam's debt to berated by s&p. it even has a deadline here, december 5th, that is when olam

has to accept this offer for huddy waters to pay for its get to berated. yesterday olam ceo came into the studio and he defended the company calling them an attack. have a listen. >> clearly this is an unwelcome distraction for us. we want to put it behind us and continue with more important and i would say more exciting business of creating value for our last being shareholders. but the attack has put pressure on our stakeholders, whether bond holders or shareholders. we're delighted and grateful that they are by and large standing by us. >> i'm not sure if his other business is more exciting than this battle going on, but olam does have one important investor in its corner and that would be the state owned thomasek. that has helped the share price from completely tanking.

in the latest report from muddy waters, a rebuttal, it minced no words saying that it seems the titanic, that would be olam, is still heading full steam toward the iceberg. it also said olam is using ernst & young as a crutch rather than attempting to provide substantial answers to issues. and then it compared the company to enron. so as you can see, it's heating up and important to note muddy waters is in fact a short seller. so it profits from betting on a decrease in olam, which it is. now, muddy waters of course after short selling shall chinese companies and it record has been a little bit mixed, it did of course its most famous case, but record against other american listed chinese companies have been a bit shoddy including new or yenletal and focus media, they have largely survived. focus media even attracting a buyout offer. so there you have it, kelly, very difficult to keep track of,

but there's been reports and words back and forth. >> doing a great job. deidre wang morris for us. zynga and facebook will amended their partnership. zynga will not have to use facebook payments on its own site or the exclusive social site for its games. facebook will be allowed to develop its own games now after the he saend of the first quart. zynga shares down almost 12%. it used to hold that when you bought a computer, you'd also be in the market for a lot of accessories. that's meant big bucks in the past, but now with tablets starting to democrat nature the landscape, the world has changed and jon fortt reports companies are quickly learn to go adapt. >> no secret that the pc business itself has been

suffering. it was down 8% worldwide in q3, and recent earnings reports from hp, dell and others reflected that upheaval. but the impact goes far deeper than that in the pc era, a whole industry full of pc accessory makers benefited from every computer sale. shoppers bought printers and ink for example. now momentum is shifting to tablets. makers will build 85 million tablets this year with three of every four coming from apple. that effect will shave 9% off pc unit growth. that's actually good news for start ups like ever note. that business gets the holiday boost pc accessory makers once enjoyed. the first weeks of january he told me are ever note's busiest period as people download productivity, apps like his for their new tablets and smartphones. to prepare for the surge, he's upgraded ever note's data center

to handle hundreds of millions of users and also pushing his team to deliver new version of ever note's apps before year end. box ceo sees a similar impact. windows pcs are now in the minority of devices. mobile devices are the fastest growing part of the business. the surge in tablet and smartphone adoption he says is fueling customer demand for services like his. so there you go. accessories used to mean printers, blank cds and cables. now much of that business is in the cloud. back to you. >> we want to know what accessories you're buying. you can e-mail that in along with anything else you've heard on the show this morning that you want to respond to. worldwide@cnbc.com. at krchlt nc @cnbcwex. and washington may be considering more sanctions against iran. we'll have the latest on that and outlook for energy prices next. and we'll loof you witheave you

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we want to show you what's happening with the oil trade. we've seen prices buffeted by

renewed unrest, but today both light crude and brent are showing a bet of a retracement, down about 0.3%. head of commodities market strategy at bnp paribas joining us. harry, we wanted to get a sense from you as the senate is expected to debate new measures that could include banning sales and transfers of special metals to iran. how the breakdown in talks with the iaea is playing into the oil trade and concerns about mideast more broadly. >> certainly. the basic answer is just going to be more geopolitical tensions around the middle east which is obviously a key producing area. and that could keep prices of oil afloat if not rise higher. i think ultimately if we tighten sanctions on iran what's going to happen is that other members of opec will have to keep on producing at elevated levels and as a result the amount of spare

production capacity we'll have in the system will remain low. that means the market is exposed to unplanned supply outages and as a result will be upwardly price sensitive. >> i'm sure it's difficult from your point of view to calibrate exactly how to factor it into 2013. because if on the one hand there's no major flare up in tension, global command may be looking weaker, downward pressure on the price. so how do you factor it in? >> certainly you could consider what will be israel's response in relation to the development of iran's nuclear program. now that we've passed u.s. elections, will they show up and potentially suggest military intervention. of course that kichd development could easily add $10 to $20 on the i'll price. relative to demand, i think we're more optimistic in the sense that we're seeing the u.s. economy turn around. we have positive readings in chinese pmi data. we short term we'll get a seasonal kick with winter

setting in. so all of those aspects in terms of demand will be supportive of prices. but it's ultimately very difficult to sort of balance out the net effects of trend growth in the world economy versus supply side risk and geopolitical tension. we're typically constructive on oil prices, but again with an element of caution. there are other risks out there especially in the shoth term. concerns over the u.s. fiscal cliff, for example, is one of them. >> and as you mentioned, concerns about the relationship. a hoegs was passed by by a pretty good margin. the move was strongly opposed by both the u.s. and israel about that. >> the only way forward is not meaningless theater at the united nations. the only way forward is to have meaningful peace talks, to engage for israelis and

palestinians to try to solve the problems together. and that's what we're proposing. direct face to face peace talks. >> against this backdrop, the next opec meeting i believe december 12th is approaching. how do you expect the nations involved to respond? >> so far i guess with wti prices under $100, saudi arabia has achieve wlad it has publicly announced it wanted as in a price under $100. so right now i think there's very little scope for change in either production or actual quotas for the cartel. relative to developments around gaza, of course they're adding an additional layer to geopolitical tensions. but then again, if you consider the region, it is not a region that produces oil or is strategic in terms of an oil transit point. it could add to existing

tensions. >> you brought up the u.s. fiscal cliff. what's the most important marginal factor at this point, is it u.s. demand, the situation in china? i realize they're all important, but when it comes to figuring out for example between now and year end where oil prices are headed, what's going to be most important? >> i think we're a bit of a catch 22 situation in the sense that the economics are more positive in the u.s. and china in general. but however market sentiment remains fragile and people are wondering as to whether or not this looming fiscal cliff will be resolved before year end. so any rallies that we have in oil are typically sold into. so we're in a range bound market between $85 and $89 on wti basis. however, we believe that given everything we said previously around iran, geopolitical tensions, winter coming up, positive economic data, all that is going to combine for much high are prices during the first quarter of next year. we see wti rising back above 100. brent possibly touching 120. so all in all buyers of up side

calls under these market situations. >> that's significant. you're talking about $100 there from about 87 on wti. that means consumers are going to see gas prices go up, could see it in their bills. in fact basically is going to be again a bit of a wealth transfer from consumers to producers. >> certainly those consumers that heat their homes using heating oil will be affected. we see a good possibility for heating oil prices to rise with this crude rally. especially in view of very low disowe lw d dislat inventories. so i think on the consumers that use electricity to heat their homes, the natural gas side of the equation is more benign than the oil side of the equation. >> harry, thanks very much for your time. now stay tuned to the show

because we will continue the geopolitical discussion with former u.s. secretary of state madeline albright. that interview at 11:40 central european time. and with christmas just weeks away, parents everywhere face the daunting task of buying their children presents. geoff and beccy took their little ones loonl to the annual toy retailers association fair to find out what's hot this year. ♪ >> the dream toys event is the uk industry's chance to showcase those products it hopes will make it on to every child's wish list and with any luck under their christmas trees. just as technology grudgingly consumes more of our wealth, toy makers are increasingly weaving it into a play experience using touch screens, apps and built-in cameras.

as technology becomes much more prevalent in the home, parents address children are instantly drawn to things that parent as have. so the ipad is becoming a family purchase. but luckily for moms and dads there are still plenty of simple lever options out will driving the market. >> we have seen a lot of lovely toys today. >> yes. >> what's the favorite toy that you've seen here? >> little lace. >> there's definitely a nostalgia theme. parents will notice a lot of old favorites coming back with a modern day twist. so is this a reflection of the bearish times we're living in or is it a wishful remembrance of christmas past? >> lego has always been a retro toy. the same brick that we had 53 years ago. but, yes, during tough time, people come back to tried and true brands. and brands they know have great play value. >> one of the products that will sneak into the market this christmas is turtle. you say that's another retro toy

coming back, but companies have got to keep it innovative, keep developing in order to be ahead of the market. so if they stand still, don't go backwards. >> more than a third of annual sales come at christmas 201 1rks but what about this year? higher utility and food prices amid won't cut it with the kids. >> should i put some of these on your christmas list? >> yes, please. >> what we used to say is that the toy market was completely recession proof. now we say recession resilient. when it come to special occasion like birthday or christmas, consumers are spending more than last year, which is encouraging. >> whether parents rerespond by going techy or timeless, they hope when it comes to spending, the sky really is still the limit. >> maybe for kid, but i think i got a few ideas for high dad

there. we want to know what the hot toy is this year. e-mail it in here. worldwide@cnbc.com. you can tweet us @cnbcwex. and still around because still ahead, investors remain on edge over the looming, yes, fiscal cliff. but imf chief christine lagarde says she's hopeful for a deal.

draghi tells leaders not to rely solely on the ecb and chastises them for past mistakes. >> the crisis has shown that we were living in a fairy world in is a. sense we underestimated. >> germany finance minister warn as greek detaught could spell the end of the euro as lawmakers prepare to vote on new funds for

athens. and japan has surprisingly strong industrial drought put in october and yet another stimulus package sending tokyo stocks to a seven month high. plus president obama takes his case for tax hikes for the wealthy to the american people today as the war of words between democrats and republicans over the fiscal cliff heats up. today we're taking a look at where futures are positioned and the dow jones industrial average is trying to add about 13 points at the open. it's over that 13,000 level we've been watching. the nasdaq, s&p are also looking to finish the month slightly higher. interestingly enough, the nasdaq has been higher for the month even though apple, its major component, has been weak. now, the cnbc ftse global 300 gives you a sense of the kind of

trade we've seen overnight. we're up about a tenth of a percent overall, though. not bad. shanghai composite is in the red and significantly so for the month. european bourses, with the exception of spain, green arrows. spain down about a third of a percent. pair rirks germany here in britain, stocks trying to add as we continue the trading session this morning. take a look at the bond space where spain and italy, the rally continues. prices rising, yields falling under 5.4 and at about 4.5% respectively there. gilts and bunds seeing rotation away. yields up a bit. forex, euro is the focus once again. we're seeing 1.0 level just slipping below it. we were over earlier this morning as grag gi was talking. but we'll continue to seat kind of concerns back and forth about commentary from determine any as to whether the greek write-down is viable going forward.

dollar-yen, we are seeing it up two-thirds of a percent, 8266 is the level. stocks reacting to headlines around the world. optimism helped push the stocs up for most of the week. but today, shanghai up 0.9%. big movers were the property developers. even though we've had comments from policymakers saying restrictions on the property market will remain firmly in place. but investors did not care, they kept snapping up those stocks. the hang seng finished up with

half a percent gain drag was a jewelry maker with disappointing earnings results. the nikkei as you mentioned reacting to some better than expected economic data, up half a percent. asx down 0.6%. let's get to the november performances. as you can see, as kelly mentioned, the shanghai composite was the worst performer by a long shot. down 4.3%. again we are seeing reforms in the market, hearing positive comments from banks.

hang seng wrapped up another good month. third month of gains bringing year to date losses to something like 20%. nikkei was the best performer in asia for the month and that is because it's all about politics there and investors are looking forward to avay taking the reins and expecting big monetary easing there. we have the kospi 23i7bishing up just a tad. 1.1%. asx 200 down about a quarter of a percent. so not a bad month here in asia. minus the shanghai composite. >> deidre, thanks very much. want to turn our attention back to europe. we're getting figures out and it's pretty soft batch. first of all, the eurozone unemployment rate has hit 11.7% for october. this line with expectations, but it is also the high he is since the euro was created. in the meantime, the cpi coming in soft, up 2.2% on the year for november. that's versus october's 2.5%. that headline rate is the lowest

since december 2010. and ecb president mario draghi has urged the eurozone governments to get their finances in order saying they can't rely solely on the central bank for help. speaking in paris, he also said countries should a learn from their past mistakes. >> the crisis has shown that we were living in a ferairy world. >> for more we're joined by managing director of market strategy and research at roubini global economics. 11.7% on the unemployment rate. france one of the reasons for that jump. does it change the outlook for the eurozone? >> it confirms it. we'll have a bad year, next year will be a bad year, as well. i think a lot of people have been expecting stabilization to improve things. i think it's making things less bad. but, you know, i guess at the margin that's an improvement,

but nothing has been solved as he was showing. >> and his comments really focused on this rebalancing that didn't happen. we have german retail sales data today which was down significantly even though germany is supposed to be where the consumer spending power is. >> we think it's extremely important that the eurozone rebalances and it's important that the world economy rebalances. >> we look every year to see if they'll officially calm china one or not, but sort of acknowledged that the main strides towards less intervention in the forex market, and said it's really

germany where we're seeing a lot of the trouble and of course as we know in switcher land, reserve piling up significantly. >> i think where we're headed is europe will become a net exporter of capital to the rest of the world. germany is forcing the savings rate in the periphery up. with fiscal adjustment, lack of credit, savings will go up. there's still a disaster in the offing. it might continue to be put off by mario draghi despite what he says. so we'll continue to see muddle through. so investments will go down. consumption won't make up the difference. so eurozone will be an exporter of capital to the rest of the world. >> where does it leave spain and greece? >> in dire straits. to me it suggests that the whole

situation suggests that we're going to continue down the trajectory that we're on, which is nobody really wants to deal with the issues. super mario comes in every so often with a big stick, but he also throws out some carrots because otherwise we'll go over the brink of disaster and that means we're not making any progress. everything important keeps being put off. >> almost frozen in time. fascinating. he'll stick around for us. we'll take a quick break. but coming up, president obama is laying some of his cards on the table in budget ghoesh yanes with congress. republicans are firing back.

these are your headlines. the war of words over the fiscal cliff intensifies as obama prepares to take his case to the american people. the eurozone was living in a, quote, fairy world. draghi tells governments they cannot rely only on ecb help and chastises them for past mistakes. and schaeuble warns a default could spell the end of the euro. president obama travels to a suburb of philadelphia today to

tour a local toy company. he'll speak at noon eastern time and will continue to press republicans to let tax cuts expire for people making more than $250,000 a year. reports suggest the president's opening bid and budget talks calls for a $1.6 trillion tax hike, $50 billion in new in-practice straukt spending, and unfettered power to raise the u.s. debt ceiling. that was laid out to lawmakers yesterday by tim geithner and led to sharp comments there both sides of the aisle. >> now is the time for the republicans to move past this happy talk about revenues, ill defined, of course, and put specifics on the table. the president has made his proposal. we need a proposal from them. >> what we don't know is what the white house is willing to do to get serious about solving our debt crisis. >> after her meeting with geithner, nancy pelosi says congress should address the fiscal cliff in two stages.

first lawmaker shoes agree to spending cuts and an infrastructure package along with passing the middle class tax cut. she says tax and entitlement reform would then come in the next year. mean while christine lagarde says she's hopeful an agreement can be found. >> are you confident that they will reach an agreement? >> i have to come to talk about the fiscal cliff? practicing matti >> we all have fiscal cliff fatigue. >> yeah, i think it's totally understandable, but it still hasn't been dealt with as we've just seen. we think there will be a fiscal slide. we have kind of three scenarios in find. a full fiscal cliff, a bunny slope or something in the middle, a fiscal slide. and i think that's where we're headed. we believe it will be in the neighborhood of 1.5% of gdp in fiscal adjustment and i think

that's obviously better than the full lack of 4.5. and it's better than -- worse than something that wouldn't make too much difference. 1.5 will make an important difference still. >> and what's in that 1.5% in terms of tax hikes and spending cuts? >> probably are going to be a brunch of different things in it, but the main thing that will be close to 1% of u.s. gdp is the expiring of the payroll tax cut. both sides of the aisle agree on that. it will fall disproceportiona a on middle income households. >> and instead of the bush tax cuts for example which are a decade old, these were meant as very specific kind of post financial crisis stimulus. so they appear to be going away. but as you say, there will be a mathematical hit to gdp because of that. is the economy strong enough to handle that hit? >> well, we reckon the economy

is probably growing somewhere in the 1.5% to 2% range and is gradually repairing itself and healing itself with the assistance of the fiscal deficit. and this is one of the key things that if you pull that away too soon, you'll slow down the repair in the private sector balance sheets. and then you'll go much closer to stall speed so the economy will be much more vulnerable and exposed to shocks from europe, oil, you name it. >> and of course it increases the deficit, makes the troubles more difficult to direct longer term and now they want it do sort of the major reform entitlement next year. is that ever going to happen if the impetus isn't to deal with it right away? >> i think nancy pelosi and others are correct that the real issue, not just democrats, but also various republicans and bowles-simpson and everyone else, the real issue confronting the united states is not

tomorrow's fiscal cliff. it's the outyears and the fiscal abyss of these entitlements that are unfunded. clearly unaffordable. so our view of the optimal way to deal with this is to not worry about today's fiscal deficit because that's a consequence of where the economy is. absorb that and make a credible commitment bipartisan enshrined in law to deal with this by having a phased in entitlement reform. it's very hard as a practical matter to see that happening without a bond market crisis. >> and we don't have much time, but what would be the key planning of that entitlement reform? >> rolling back the unfunded medicare giveaways of the second george w. bush administration. >> medicare and medicaid combined 20%. so huge. we want to give you a quick sense of the agenda in the u.s. october personal income and

intending with the savings rate will be out at 8:30 a.m. eastern. at 10:00 a.m., we'll get the november chicago pmi. expected to show a reading of 50 which is a slight uptick from last month. and an important gauge of the ism data that we'll get later. stick around because straight ahead, a welcome phillip for japan as factory output rises for the first time in four months. is the worst finally over? we'll weigh in. and we'll leave you with a view of the heat map. up 0.05%. can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on groushipping at fedex office.

today is the 30th anniversary of the release of "thriller." still the best selling worldwide. and it also had several top ten hits including beat it and billy jean. music video was also a major event. let's take a look at how u.s. futures are trading. dow jones implied to add about

33. a couple for s&p and nasdaq. a raft of economic data out from japan this morning, some of it surprising towards the up side. industrial outpit recovering to 1.#% versus expectations of a fall of 2.2%. but things are not will being so upbeat elsewhere. jobless rate in line with expectations, but consumer price index also came in flat as expected. price stabilization a key point of contention in next month's elections. both parties stressing the need for the central bank to do more.

household spending fell from a year earlier showing consumers have yet to loosen their purse strings. the drop less 245than analysts looking for. a lot of pressure to beat inflation, but what does that mean for the asian population counting on their savings. >> here's what one market watcher had to say. >> there is a big issue here and the strange thing about it is that it's probably going to be those older conservative especially rural voters who are going to put ldp into power in the election this month for a long time especially if we do get inflation kicking in, japanese savers, post office savings in particular, are not fwok to be happy at the prospect of earning what about amounts to 0% on their savings. and that could be shifts in thinking among savers going forward. >> that's the latest out this

morning from japan. back to you. tokyo has given the itthumb up to a stimulus plan, its second in two months. the package is about double the size much the last one which was announced just last month. for viewers in the u.s. who have been consumed maybe by the u.s. election, may be a waiver the china election, it may be news that all of a sudden we're now facing a japan election. is this going to be a watershed moment or is this just yet another in the long succession of political turnovers we've seen for japan without much economic improvement? >> i think it will be the latter. there are some signs of change and some of the data have improved. but i think the bigger picture here is that japan faces some serious structural problems and going down the fiscal stimulus route, asking the central bank on do more is another dodge of not dealing with the structural

problem. labor market is rigid. country opening up a little bit to immigration, but not very much. so i agree, if we have inflation picking up, which i doubt we'll get very much, how are people going to respond to that. it's a nation of savers ersaver. they don't want inflation. >> what if there is some sort of big bang measure, let's put aside the issue of central bank end inside at this point. if there is a coordinated effort to try and get inflation higher to come in with massive stimulus in some way shape or form, is that enough to change things around? >> it may make some little difference at the margin. i think the big bang that needs to happen is that somehow women need to be encouraged into the workforce. somehow one of the most zen owe phobic societies in the world needs to open up much more dramatically to integration. powe phobic societies in the world needs to open up much more dramatically to integration. p reverse the ticking time bomb of the graphics. part of the reason shrinking in

nominal terms is because the population is old and shrinking. so very difficult to deal with that. >> is the widow maker trade going to finally pay off here? shorting jgbs finally the right strategy? >> i think that will happen eventually, but i think the guys who are putting on the hedge funds and the others putting on that trade now i hope they have deep pockets. high sense is what drive this is obviously is inflation and risk appetite around the rest of the world. and if we haven't solved any of our problems with the rest of the world, it is still very possible that the yen will tend to have periodic upswings and that that will impose additional deflation their impetus in japan. >> triple digit yen anytime soon in our life times? >> i think when and if we get over the fiscal cliff and do something very rational in the u.s., we could start to see the u.s. really i don't want to say

taking off, but relative to the rest of the developed world doing much better. and that might be quite good for the dollar and impose a swing of capital outflows out of japan and out of western europe. >> great point. we'll leave it there. thanks so much. straight ahead on the show, the u.s. has cautiously condemned the syrian regime while refraining from outright intervention. but will ongoing violence force america to carry a bigger stick? we'll speak with madeline albright.

i'm kelly evans and these are your headlines. tag gi turning up the heat on eurozone governments saying not to rely solely on the ecb and chastiseses them for past mistakes. >> the crisis has shown that we were living in a fairy world. germany's finance minister warn as greek default could be the end of the euro. and president obama takes his case for tax hikes on the wealthy to the american people today as the war of words between democrats and republicans over the fiscal cliff heats up.

political rhetoric yesterday hasn't done too much to dim spirits in markets overnight. we are seeing a rally shaping up overnight. dow jones industrial average now wants to add about 31 at the open. nasdaq and s&p also pointed a little higher. the nasdaq is looking green for the honesty despite apple being in the red. quick look at the cnbc ftse global 300 for a sense of the kind of activity we've seen overnight and we've edged up just a little bit since the last time we checked in, now up just under 0.1%. so not major moves on this friday. european markets are building a bit of a rally this morning. ftse adding 0.3%. ibex 35 sitting this one out,

down about 0.3% after pretty strong gains in yesterday's session. so how do you make money in these markets? here's what some of our guests have been telling us all morning. >> i think markets seem to be liking risk. it looks like fiscal cliff negotiations right now, people still have faith in it. very little risk is actually being priced in. >> these levels i would recommend buying in to spain. i do also quite like the semi core markets where you're getting that little bit extra yield. so france and belgium. >> still strong reasons why one would buy gold. every central bank in the world is seeking to weaken its

currency, monetize its debt. so strong structural arguments why you should buy gold in any currency. >> president obama will continue to press republicans to let tax cuts expire for people make more than $250,000 a year. reports say the president's opening wid in budget talks calls for $1.6 trillion tax increase. that plan whether he had to sharp comments from both sides of the political aisle. >> now is the time for republicans to you've past this happy talk about revenues ill defined of course and put specifics on the table. the president has made his proposal. >> what we don't know is what the white house is willing to do it get serious about solving our debt crisis. >> if more, we're joined by mark zandi, chief economist at moody's analytics who is here in london. welcome. >> thank you.

>> so the fiscal cliff issue, end of the year is looming. we saw the response to this opening gambit by president obama. how likely is it that this is the final plan put forward, what elements do you expect to be most critical here as talks continue? >> i think there will be a lot of brinkmanship. this is just the beginning of the process. i think it will be a while. we'll probably go into next year and actually go over the cliff temporarily before they get a deal. >> so you're in the over the cliff camp. >> if you talk to people in washington, they think it will be done before christmas. how can they say we'll go away on say case, don't worry, we'll be back and solve this, but i think it will be pretty tough to solve it before we actually go into next year. >> merry christmas, here is your tax hike? >> i think people are preparing for that anyway. i think everyone realizes that tax rates for upper households will go up. >> certainly companies are aware of what's happening. >> you're seeing more deals to take advantage of the lower

capital gains taxes. so people understand this. >> but i wonder if average people are as sophisticated. is it really going to matter if we talk about the payroll tax cut sunsetting? >> i think most people aren't focused on this, the payroll tax holiday will expire, so that's a 2% tax increase. but i don't think most people even realize they got the tax cut and it's one of the reasons why it will go away because policymakers aren't getting any credit for it. >> so if we they mathematically it will be a hit to gdp, is it going to be something that the economy gets knocked off course is this>> i think the final deal will have fiscal drag in it. the expiration of the payroll tax holiday will be part of that. emergency unemployment insurance program will expire. and of course that higher tax rate on upper income households. >> a lot of people will be

without those job rest benefits. >> and if you look at all the stimulus that's been provided since the recession hit will, part of that is emergency unemployment insurance. yeah. so that's been a big part of it. it is winding down because unemployment in the united states is declining. and people have run out of time. >> how important was the ability to raise the debt limit without hitting the ceiling constantly? >> the debt creeling is critical. i don't think we get a deal if that's not part of it. and there has to be longer term debt reduction. i don't think this is piece meal. i think this is a big grand bargain at the end of the day. i actually think infrastructure plan is a good idea, but i'd be

skeptical if it gets through the congress. >> nancy pelosi has said this is a two part thing. worry about the pressing stuff now and major entitlement reform next year. is that really going to happen? >> i think it has to. i think they layout the contours, the size of the cuts and tax increases and then say go figure out the details. because this is very complex. reform takes a while and give the committee 6, 12 months to cross the ts, dot the is. >> whatever happened to the sequester? is that still on the table? >> no, it won't happen. that will go away as part of the deal. they will vee long term deficit reduction where they'll have spending cuts and more tax revenue, but the sequester will go away as part of that process. >> and last point, what's the mark zandi view on gdp growth? >> about the same as this rear because we have the fiscal drag. so just over 2%.

>> more of the same. great. thanks for stopping by. straight ahead, the administration is looking overseas to assert america's role in the middle east. we'll speak to madeleine albright live from istanbul next. [ male announcer ] this december, remember -- ♪ you can stay in and like something... ♪ [ car alarm deactivates ] ♪ ...or you can get out there with your family and actually like something. ♪ the lexus december to remember sales event is on, offering some of our best values of the year. this is the pursuit of perfection.

germ any's low he house of parliament has approved the greek bailout package. silvia wadhwa will join us in just a few minutes time for more on that vote. the u.s. state department has con determined syria for launching another assault on its people. the communication shutdown comes as fighting forced today h damascus airport to close thursday night. is now the time for the international community to adopt a tougher stance this we're joined by madeleine albright, former u.s. secretary of state. madame secretary, thanks very much for joining us. >> good to be with you. thank you. >> we'd like to know straight away whether it's time now for the international community and especially the u.s. toed a don't a tou to adopt a tough every stance

with regard to syria. >> i'm sure the international community and the united states are taking -- paying very close attention to what is going on and they have been taking pretty tough instances in terms of making clear support for this coalition of the rebel groups and also in terms of looking at what turkey needs and generally how to make clear that the international community believes that saddam hussein's -- sorry, that bashir assad's time is over. so i think they are making pretty clear that they have a tough stance. >> a tough stance doesn't mean anything unless it's backed up with action. what is it that can actually be done at this point and account u.s. afford to be embroiled in yet another region in the mideast? >> women, i think thell, i thin reason that there is an part about having the international community involved.

it's been very clear that assistance is being given. it is being given in a number of ways. people are concerned about the refugees and as you pointed out, there is very clear messages about not cutting off the internet, the fact that the damascus airport has been closed. so i am this tin turkey and i'm up-to-date in terms of what the american government is doing, but this is a serious issue and they're looking at it very carefully. >> and we want to stick with the region. palestine has won recognition as an observer state p. you've opposed statehood in the past. do you maintain tahat position? >> i think it's been made clear that the united states believes in a two state solution, but that the path through the general assembly is not the way to go. ambassador rice made that point very clear in her explanation yesterday and the american

position is that we would like to see movement forward. the general assembly is the the wrong place. >> before being secretary of state, you were the ambassador to the u.n. and you've raised this issue in the past. is the u.n. losing its efficacy, is there a better way going forward to address some of these key issues? >> well, i believe in the u.n. and the security council and what has been interesting is the number of resolutions that have been taken, but ultimately what needs to happen is cooperation i think with a regional organization and one looks at what the tools are for doing something. so nato is a very important part they are in all these activities. so from their vantage point of a professor at this time, i think it is interesting to kind of

look at what the tools that are available. but the united nations is the voice of the international community. what is really disappointing is the role that the russians are not playing. by taking a stand that is not helpful in terms of supporting the international community. >> would you extend that to their stance with regard to iran? >> well, i think that the iran situation is different. what is interesting on iran is that the international community has been acting together in a very tough sanctions regime and in many ways have made clear that iran is an isolated country. and the russians have been quite helpful in terms of some of their previous activities. so i think that on iran the international community have been standing together on tough sanctions.

>> you mentioned iran being isolated, but you're in turkey for the global infrastructure initiative there. you're in a country which has been involved in this sort of gold for gas trade with iran through dubai. are you concerned by the level of involvement there, the way in which countries in some cases turkey are trying to skirt these u.s. sanctions? >> i think that also is unclear to me anyway. and i'm sure that the the united states government is talking to turkey on this issue. everybody is aware of the sanctions regime. so i'm sure that there are discussions going on between the two governments. >> madame secretary, thanks for letting us press on you all these policy issues. in your role now, what do you think is the most critical issue in foreign policy at this point? >> well, there are a series of them. i do think that one has to deal with the issue of continuing

terrorism in certain places and as we've already raised, the nuclear proliferation issue. i also -- my personal belief is that the gap between the rich and the poor is something that is a national security issue and needs to be looked at. and what i'm doing here in turkey is being present atten infrastructure conference which does talk about the importance of providing infrastructure in developing countries because it's really a way to pursue giving the people what they need. i believe democracy has to deliver and infrastructure is one of the deliverables that really proves that we can help each over and eliminates what is a basic injustice as this gap between the rich and the poor. >> internal difficulties to overcome, as well. madeleine albright former u.s. secretary of state. thank you again for your time this morning. now if you're just joining

us, a reminder these are your headlines. the war of words over the fiscal cliff intensifies as obama prepares to take his case to the american people. the eurozone was living in a, quote, ferry i go on world, that's what draghi tells governments. they can't rely anymore on ecb help and chastises them for past mistakes. and germany gives the green light to a new bailout for greece after the finance minister warns an exit could spell the end of a eurozone. germany's lower house of parliament has given the go ahead for a fresh bailout package for greece with an overwhelming majority. let's get reaction from silvia wadhwa. >> well, the vote as it were, the yes vote was never really a question. we know that they were largely on board. only one party has been voting

against it all along. this that's the leftest party. 76 seats in parliament. they voted against it on block. but we have had all together 100 votes against, 11 abstentions, and 443 for it. so 35 not from the left party who actually voted against the package or at least didn't vote for it. we didn't quite know yet whether angela merkel got the majority out of her own coalition or whether she had to rely on some of the votes from the opposition, but certainly the fact that she can never be quite sure where her own party can carry it, the own party can carry it, makes it that much who are difficult. she has to keep the opposition on board, she has kept it on board, but they're always saying, look, you have to keep informing us, you have to give us a bit more time. no more fast tracking of new bailout deals. and i think that's something she has to take home with her. >> okay, silvia, thank you very

much. switching to france, in an interview with cnbc, the industrial minister has defended proposals to nationalize two of the steel plants. comments made headlines earlier this week when he suggested he should leave france due to years of broken promises. >> translator: bramarack obama' nationalized. all countries are nationalizizing. i've also noticed british nationalized six banks. i don't see what the problem is. what about the significanals yo sending out to investors? it's a very good sign to send out. nationalizing is a very modern step to it take especially when you not only nationalize losses, but profits, as well. when you make public private partnerships. so not like back this 1982 then. it's got nothing to do with it. i think the strategy we're putting forward is extremely modern and adapted to the

current times of crisis. it's a way of making the economy work in the interests of industry more than just helping the financial sector. extraordinary. as the fiscal cliff fight rages on in washington, we will take a look at the ripple effect being felt on wall street. a preview of the trading day when we come back.

it's been a pretty strong session in europe stocks this morning. for the most part led by thee xetra dax up by 0.3%. u.s. futures, dow about 33 points at the open. so perhaps we could finish the month in the green. let's see what ben liechtenstein

thinks. so what's your sense of how this day is shaping up? will we finish on an up note? >> we're seeing slightly positive territory, but very little conviction associated with the trade. again off the weak low that we saw i think it was wednesday, 1383 roughly. the last couple days it's been of a chop type trade. we're headed into the session similar situation, unable to get up before yesterday's high in the overnight session. i'm looking at the dollar really right now. it's kind of in chop trade, as well. even with all the developments and news coming out of europe, we're seeing a very choppy type currency trade. so so far very little conviction. mostly the energy we've been seeing associated with the trade has been news related. this week there's been positive economic data released in terms of the housing data in the u.s.

very encouraging there. and we have very limited numbers scheduled for release here today. so i think it will be focused on fiscal cliff talks. i think obama will be speaking at some point today. and so that's definitely what traders have been focused on. but still while we are holding these bid levels, really kind of chop type trade and not a lot of energy, not a lot of yiks for the most part. >> what about the slew of special difference sends we've be dividends we've been seeing? >> i think that's been encouraging for the most part. but one thing i just heard about the dividends from microsoft and oracle, but i heard pc sales for microsoft were off like 20 some% year to year. so while they came out with the windows 8 launch into the holidays, really it's kind of backfired for the most part and there hasn't been a lot of major response to that relative to some of the other apple type releases that we've seen. and again it's just faltering if

you will. but i think the positive energy if you will certainly contributed as well as the economic data this terms of contributing to the up side activity. but it's a bit of a grind to the up side. again, not these -- other than wednesday, not these really huge moves with the high conviction type activity. >> okay. just one month left in the calendar year. we'll see if conviction comes back. ben liechtenstein, traders audio.com. and before we go, we'll learn in just a few short hours of identity of one of the winners of the power ball jackpot. missouri lottery officials have verified the ticket bought at this gas station that you're looking at in the small town of dear born. they've scheduled a news conference for 12:00 p.m. eastern. the second ticket was sold as a convenience store near phoenix. no one there has come forward yet. which may be a wise move. that will do it for us here. u.s. "squawk box" is up next.

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today's top story, markets and the fiscal cliff. stocks swing on nearly every comment coming out of washington. the american american consumer still -- she still exists. a key read on income and spending due before the bell. and in europe, an important vote, yep, we're still worried about this in germany to green light another greek bailout. it's friday, november 30th. i think that's the last day of the month. 2012. "squawk box" -- yep. "squawk box" begins right now.